Wednesday, June 25, 2014

Market dynamism …. Layman’s thoughts

The modern economics advises us to set markets free of regulatory mechanisms so that the underlying market forces shall naturally put balances on demand, supply and prices. The argument is correct in a way that naturally evolving capacities would be stronger, development oriented and long living. But layman’s suspicion is that, what would happen if governments withdraw all controls over the commodity prices and certain elements in the industry, on the other hand, try to put prices at some fictitious heights and push it further from there? There are chances for it to happen if someone or some group in the supply chain is/are aggressive in getting undue profit out of business – or want to see the market condition in a way pre-set by them. If it happens, then again, the natural market dynamism shall be upset as in the case of regulatory systems - perhaps in a manner worse than the regulatory systems.

The above anxiety is there in the minds of the layman all over the world. We cannot neglect these much massive anxiety as baseless. Because ‘anxiety’ itself is a mechanism engaged by the nature to balance something else to ensure a congenial environment for living. Therefore it has to be addressed properly. What we can do to ensure that market dynamism is not upset arbitrarily by some elements from the market itself?

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